There is 0 risk to getting repaid from the US. We will print for the lenders the exact amount they are promised.
Promises kept. All is good
Promises kept. All is good
Nobody has ever tried this before!
Every sovereign can print money and repay lenders, but doing so cause an inflationary cycle. When it looks like that is inevitable, borrowing rates start spiralling, so you have to print more money, and soon you are Zimbabwe.
Like the US is catastrophically indebted -- both parties have been negligent on this, though one party has been much, much worse than the other -- and right now there's a certain defeated malaise about 40T in debt. The last time bond rates were this high the country had only $6T in debt, and even that was considered a catastrophic level, and bond rate trends are...not looking good for those want government funds leftover after servicing the debt.
"Oh but we'll just grow the economy..."
The debt has grown by 6.5x, and the GDP has grown by 2.8x since 2002. The math just isn't mathing. And remember that bond prices were historically low, and if there was ever a time to pay down the debt....
Nope, $2T deficit, "hide in the ballroom bunker and hold the world hostage with the nuclear launch button" projects, and now a hilarious $1.3T bribe to voters. Utterly busted. It is astonishing that it took this long for the world's lenders to chuckle and say nah.
Debt service costs as a percent of GDP are in fact lower than they were in the 1980's, when things came out fine. Is this the best way to run the budget? Likely no. Should we make policy changes? Certainly yes.
Is the best way to drive that policy argument flinging around adjectives like "catastrophically indebted". No. If you have a suggestion make a suggestion. Screaming about "The Problem" without discussing policy is echo chamber logic.
You could very easily force congress to balance the budget (both parties and the media have complained endlessly about this for exactly no good reason). You could also freeze spending at current levels and force congress to do it's job: allocate our limited resources most productively.
Hard to get re elected doing the right thing, but maybe we just need a throw away set of leaders to do the hard work?
This is as close as it can be to clearly explain. The problem is that most of our politicians are not explaining it and instead ignoring it. As an individual the only thing you can do is vote for candidates who are willing to have that hard conversation with the public. Unfortunately it looks like that would require voting for a third party candidate and a vanishingly small minority of the electorate is willing to do that. So given all of that context I'm not really sure that the term "Catastrophically indebted" is wrong.
This is an amazing use of the "in fact" trope, in exactly the same misleading way[1]. I talked about debt, and you casually shifted to servicing costs which presumes that rates stay historically low...when they're actually rapidly rising. Comical.
In the 1980s, the debt to GDP ratio was less than half what it currently is. Rates were higher, making the debt a crisis level then, but maybe you haven't noticed...rates are going up. Indeed, right now the rates were historically low, and anyone with functioning grey matter saw what was coming.
The US has an absolutely solidified, structural deficit -- utterly zero chance of paying down the debt, and a desperate need to constantly be borrowing more -- and an enormous debt. The trajectory of rates say this is crisis levels.
It's actually kind of funny reading your ridiculous comment -- "screaming", "echo chamber", etc -- when you sound completely in denial.
Your argument is basically the guy that used the "0% interest for six months" checks he just got with his 28% credit card, telling everyone that it's free money, so there's no problem if he goes wild. ROFL.
Sounds like it's time for a $1.5T military budget and a $1.3T bribe! Free money!
Sidenote: When asked about the bond market, Trump seriously offered up the "military solution". Utter insanity.
[1] - It's also simply a lie, making this extra funny. The highest historic servicing cost was 3.2% of GDP. It is currently projected at 3.3%, and that presumes rates don't keep spiralling up. So your "in fact" was simple bullshit, even as you tried the narrative shift by changing from debt to servicing costs.
Shouting about deficits is, to be blunt, just crack for the incurious mind. It's a party you're throwing for people who agree with you. Refusing to treat with the very real (and despite your hyperbole, very soluble) problems is likewise a trick your brain is using to expand the guest list: you can get almost everyone to sit at a "Deficits Suck" table, it's much harder to populate a "Let's Talk About Entitlement Restructuring and a VAT" forum.
But it's the boring wonks at the forum (the one's you're shouting at!) who are ultimately on the hook for saving you.
I'm not American, and no one needs to "save me". The country is a fucking idiocracy, and you elected a fascist self-dealing conman pedophile rapist. I pointed out objective, indisputable reality and you responded with some farcical lies and pearl clutching nonsense.
But you know, when your country is bankrupt, increasing military spending $600B, paying for endless vanity projects for that disgusting bag of shit to emblazon his shameful name on your country for eternity, or even entertaining the disgusting "bribe the population" farce is just fantasy.
Endlessly giving tax cuts and breaks to your kleptocracy/plutocrat class...maybe an incredibly stupid thing to do, no?
Nah, something something 1980s nothing we can do hey let's build an arch to celebrate the most catastrophically destructive president in history!
> It's also simply a lie
I don't know what you're trying to cite but your numbers are wrong per FRED:
To be clear, my statement was-
"The highest historic servicing cost was 3.2% of GDP. It is currently projected at 3.3%, and that presumes rates don't keep spiralling up."
https://fred.stlouisfed.org/series/fyoigda188s
That ends at the beginning of 2025, and already it was equalling the historic max (which was during a brutal recession, it should be noted). Since then the debt has added trillions more (about $4T), and the rate due on that debt has kept increasing. Oh, and the debt of the US is increasing quite a clip faster than the US economy is "growing", even with the fantasy numbers from the sharpie presidency.
Yeah, jabroni, my statement is 100% confirmed fact. Indeed, it's incredibly optimistic, really, because if rates follow current trends, things are going to get dramatically worse by year end.
You just pay off old promises that were expected to be kept.
The real risk is that new lenders will not be willing to lend you, yes. But not outright inflation.
If you follow the accounting in a floating exchange rate system you’ll find they don’t.
Find me a banker that will turn down free basis points and I’ll show you a pink unicorn.
I'm not predicting that this will happen, but we do need to take the debt seriously and not assume we will be able to just print money to get rid of it.